When you hear the term “loan shark” what image comes to mind? Perhaps you envision some ruthless mob boss or a shady character in a dimly lit bar.​Loan sharks don’t have a good reputation. They lend money at astronomical interest rates, plus there’s the potential for bodily harm if you don’t repay the debt on time.

Now, your local payday lender may not break your legs if you fail to pay but they also participate in predatory lending practices similar to those used by loan sharks.

Payday vs. Online Lendershigh-interest rate lenders usually fall into two categories - payday lenders and online lenders. Both payday and online lenders charge very high-interest rates on loans but offer different repayment options.

Payday LendersRepayment on payday loans is generally made in full on a set future date. It is not unusual for full payment to be expected within two weeks.

Online LendersOnline lenders are often located on Indian reservations or other areas outside of the U.S. and charge high rates for loans up to $5,000.

Repayment on online loans are paid in monthly installments but, you have the option to refinance the debt if you don’t believe that it can be repaid within two months.

Common Predatory PracticesUnfortunately, there are limited options available to you if you’ve fallen prey to one of these “modern-day loan sharks.” The best way to resolve your problem is to repay the debt as soon as possible. However, that may not always be an option.

Expect to pay additional fees if you are not able to repay the debt. Payday lenders will usually refinance the debt for another 2-4 weeks but they tack on the fees. Charging $15 for every $100 borrowed isn’t unheard of.

Online lenders themselves don’t refinance debt. If you’re unable to refinance with another lender, then you’ll surely be faced with late fees and other charges. Online lenders only accept ACH payments. This means that if you don’t have money in your account, you’ll be charged NSF fees from your bank as well.

Overcoming Predatory PracticesThe best way to overcome the predatory practices of online lenders and payday loans is to avoid them in the first place.

If you must take out a high-interest rate loan, do your best to pay back the loan on time. With online lenders, you can try to get the loan refinanced. If not, your only option is to make the monthly payments on time.​In certain cases, you have the law on your side and can renegotiate the terms based on interest rates set by your state’s usury laws.